Investing in these uncertain times

[Nicola Pellegrino]

Hi all, 

My name is Nick, I'm Italian and I landed to the BP forum after reading BT's book. Great to be in this community :) 

here's the quick story: 

Almost two months ago I've signed the preliminary contract for a 2-story apartment in the South of Italy, with the aim of renting it out to summer tourists (the area is full of national and international tourists during summer), market is very hot and it's become quite a trend in recent years. 

Right after signing, the pandemic exploded and - I'll cut it short - I'm stress-testing all my assumptions and decisions. 

1. Forecasts of tourists in Italy for 2020 has gone down more than 60% due to the various travel bans >> negative impact on ROI in 1st and possibly 2nd year too.

2. Banks have further lowered interest rates >> I'm financing 80% of LTV through a traditional mortgage, therefore I can potentially have a 1% fixed interest rate to 20-25y.

3. My main income is relatively stable as I work for a solid tech company 

• Further details:
• Property value: $190K
• LTV 80%
• Down payment: $38K
• House needs rehab (costs tbd)
• Traditional mortgage through a bank 
• Expected yearly income (worst & best case): $10k and $20k a year
• Given these info, would you complete the purchase agreement?
• If no, would you pull out negotiating with the seller with the risk of losing $10k and being sued?
• if yes, what's your best advice for investing under such uncertain times? 
• I'd love to get your experienced advise here. 
• Thanks, and stay safe!